After a three day long auction that started Friday morning and didn't end until late Sunday night, Ciena has been named the winning bidder for Nortel's Optical Networking and Carrier Ethernet businesses (with NSN being the second bidder). Ciena's final bid came in at US$530 million in cash plus US$239 in convertible notes.

By winning the auction, Ciena consummates many of the deal parameters that were part of it's original stalking horse bid announced back on October 7th. Specifically, the agreement provides for the transfer of substantially all customers, product platforms, and a minimum of 2,000 employees* (representing more than 85% of the employee base).

Regarding the parameters of the deal, Philippe Morin's statement in this morning's press release said it best: "Ciena's commitment to the future of our product platforms, customers and employees represents an exceptionally positive outcome to a challenging journey that started over a year ago. Our employees have always been the core value of our business, and their ability to continue to innovate as part of a global industry leader is one of the most satisfying results of today's news."

Ciena issued their own press release on the agreement, in which their CEO Gary Smith talked about the benefits of bringing together these two leaders in the optical market: "These optical and carrier Ethernet assets bring exceptional technologies, talent and scale that will accelerate Ciena's current strategy to deliver innovative network solutions to customers worldwide. With this combination, we are bringing together complementary technologies in switching and transport to create an innovative powerhouse with the scale to challenge the industry status quo and offer customers a practical path for transitioning to automated, optical Ethernet-based networking."

The next step comes next week on December 2nd when a motion to approve Ciena as the acquirer will be heard by bankruptcy courts in the U.S. and Canada. Both Nortel and Ciena stated their intent to close the transaction by the first quarter of 2010.

*This includes those employees assigned to the Optical Networking and Carrier Ethernet businesses in certain EMEA jurisdictions who would transfer automatically to Ciena by operation of law.